Chavez in Brazil to Officially Join Mercosur

BRASÍLIA, BRAZIL – President Hugo Chávez met with the leaders of Brazil, Argentina and Uruguay in Brasília Tuesday to formalize Venezuela’s entrance to Mercosur – six years after the oil-rich Caribbean nation’s first attempt to join the trade bloc. The decision to let in Venezuela was taken, controversially, without Paraguay’s approval during that country’s suspension for Former President Fernando Lugo’s impeachment.

Paraguay was not invited to the summit and Paraguayan officials on Monday told the BBC they were considering their next steps to legally contest Venezuela’s entry.

It was expected that the countries would discuss the technical points of Venezuela’s entry to the bloc, which was formed in 1991 to enhance regional trade, such as Venezuela’s adoption of the alliance’s Common External Tariff.

Venezuela’s entry will increase the scope of Mercosur considerably, to about seventy percent of the population of South America, and expand its GDP to US$3.3 trillion at current prices, or 83.2 percent of total South American GDP. For Brazil, Venezuela’s entry will mean a huge new market for Brazilian exports, especially manufactured goods that will reduce its reliance on selling commodities to China.

“Brazil has already a huge trade surplus with Venezuela (our third largest) and we sell mostly value-added goods,” explained Jeferson Manhaes, an aide in the Brazilian delegation to Mercosur’s parliament. “Venezuela, which exports mostly oil, would not find in Brazil an attractive market, unless Venezuela manages to sell its oil at a much cheaper price than Brazil’s, which would be difficult given the infrastructure bottleneck Venezuela would find to transport it to Brazil´s economic heartland, the Southeast.”

Venezuela has enormous oil reserves – the largest in the world, according to OPEC – but produces very little else, and imports most of what it consumes. Brazil, with a wealth of hydropower resources and recently discovered pre-salt oil reserves of its own, has no need to buy Venezuelan oil, but an oil-rich neighbor will nonetheless be useful.

“As a regional energy power, Venezuela provides opportunities for energy agreements from natural gas to oil refining,” said David Smilde, Senior Fellow at the Washington Office on Latin America.

There are other significant trade benefits too; the currency restrictions that Venezuela currently has in place will not be allowed under Mercosur’s rules, and Chávez will not be able to expropriate foreign companies operating in Venezuela as he has done in the past.

One risk of Venezuela’s entry is the politicization of the bloc that Chávez may bring, experts say. The Venezuelan president – who faces reelection in October – is notorious for his noisy anti-American rhetoric, which would distract from economic concerns.

“It seems certain that Venezuela will test the rules and it will be interesting to see how much strength and will Mercosur has to reel Chávez in when that happens,” said Mr. Smilde.

Brazil will be hoping that the commercial benefits to Venezuela are enough to temper Chávez’s Bolivarian tendencies, said Mr. Manhaes. “Chávez knows there’s no place for radicalism in Brazil´s foreign policy agenda.”

12 Responses to "Chavez in Brazil to Officially Join Mercosur"

President Chavez is like “temptation” enticing someone to skew the pros and cons of rational judgement. He is truly charming (when needed) and one of the best ever when it comes to addressing crowds and bonding through vivid words that create images in their heads. No one can whip a mass audience into believing they are part of him and his ideas. A Master Politicion to be certain. A man who will change and adapt to survive at any cost. A man who hires campaign experts from Brazil and listens to their sound advice such as wearing tailored suits (ala the Lula syndrome) and toning down the military look. Mixing and matching to appeal to a broader target market by the above mentioned methods and promising the poor many reforms for them . They can swing the election easily for him although his opposition gets verbally assaulted by Pres. Chavez. A man who states God has cured his secretive Cancer because he has work left to help his people. Every Doctor in the world says that is impossible because one has to be cancer free for at least two years to even consider saying that. It’s all a moot point. He has a double digit lead in all polls. I wonder if his younger vibrant opponent wins will Chavez just deny it and accuse the vote of being tampered with (he knows much on this topic)and impose martial law and continue on as normal.
The plus side of allowing Venuzuela into Mercosor looks good on paper. Itdoes increase Mercosur’s scope to include 70% of South America’s population and expands it’s GDP to $3.3 trillion U.S.or 83.2% of all of Soth America’s GDP. Brazil will gain a huge new market for exporting.
The Down Side of Venezuelas entry is the fact remains that “Chavez is Chavez” so will the politicization of the Bloc be altered by what Chavez brings?
Paraquay’s blunder of impeaching President Fernando Lugo brought world condemation and a suspension of their voting until ther next regular election is held and a new President is elected. Their blunder also opened the door for Venezuela to join the Bloc since Paraguay was blocking their entry. They are still contesting Chavez joining. I’m just thinking out loud now. My own question popped up. Did former Pres. Lugo’s number two man have any other agenda besides making himself the President?
In closing , I admire Brazil and President Rousseff . I also have a personal interest in Brazil doing well and improving in many areas which they have been doing albeit a slight lull in growth in the past year partially enabled letting the Real to devalue to increase exports and curtail inflation.
My concern is Argentina’s missteps recently by President Christina Kirchner.
President Dilma Rousseff now has two dubious “friends” being Presidents Christina Kirchner and Hugo Chavez. I can separate them but will the people all over the world looking in be able. Will they do their homework ? I hope so.
Thank You For Listening. John H.

Francisco Almeida - BRAZIL August 4, 2012 at 2:53 AM

Brazil is 50% on entire South America, therefore it has the scope, the size, the weight, the soft-power to tame Chavez excesses. Paraguay’s extreme-right was a pain in the S. Historically and for centuries Brazil seeks friendship with all neighbors. We wish to dust off US plutocracy claws in South America, and prevent the region of becoming a Green Middle East of US-led mayhem. Nowadays US is by far the largest source of world evil as they became dominated by corporations, and their plutocratic Legislative branch is an alien-led zombie, while entire populace is TV-zombified plunged into a narcotic warlike mindset.

john hesse August 5, 2012 at 10:00 AM

@ Francisco Almeida.
I am fully aware of the size,scope,and influence that Brazil has . Most South American countries want to be “Brazil” because of it’s status in the world. Good luck on “taming” Chavez. I feel the only taming factor for Chavez is the clocking ticking away. Your obvious disdain and bias against the US could have served you and your opinion better if put forward in a better manner.

“US is by far the largest source of world evil as they became dominated by corporations, and their plutocratic Legislative branch is an alien-led zombie, while entire populace is TV-zombified plunged into a narcotic warlike mindset.”

These are your words. Vile statements make having a debate on a civil level similar to debating a TeaParty member. No ebb and flow.
You say you seek friendship with all neighbors. I wonder if you are selective in defining neighbors.

The US has many flaws but progress is happening to slowly correct that. Any nation that is huge is going to have regional differences,
Corruption exists in Corporations and the Gov’t at all levels . Am I talking about the US now or Brazil? I am talking about all countries.I admire the progress happening here and in Brazil.
To paint all within a group, country, or any sector with the same brush based on the actions of some within said group is insulting to the ones being painted and most importantly it shows the logic flaws in the Painter who happens to be you this time.
I could go on and post a lenghty case for my views but I don’t think you have the attention span for long posts.
Thank You For Listening, John H.

Ana K Soares August 5, 2012 at 1:19 PM

You know what? I really don’t understand why a Brazilian comes here to offend other peoples. This is a “newspaper” directed to Americans, Englishmen, and any other English-speaking people. Everybody can read and make comments and contribute, but why to offend? If there was any valid point in that comment it’s now faded. TV-Zombified people? Come on! Are Brazilians different from that? If we’re going to use the same criteria, Brazilians are Soap-operas, soccer-games, pagode-and-beer zombies as well. Come on!
As far as Chaves – Brazil will import more oil from Venezuela and Venezuela will import Pre-salt technology from Brazil.
Neighbors? We don’t have to like our neighbours just because they are neighbours. Brazilians and Argentinians are a good example for that. All that southern-nationalistic bla bla bla is hipocrisy.

john hesse August 6, 2012 at 11:12 AM

@ Ana K Soares. Thank You for your input. Your points are strong. Originaly I had a rather long reply to Francisco that I even liked (I am my worst critic) and went more in depth on Argentina, “neighbors” etc but while fact checking which I always do before I post I lost the entire long articulate post. I didn’t feel like redoing the entire post however you have inspired me to redo it because part of the “lost” post had the phrase about “You had an opportunity to present strong valid arguments against the US but the manner in which you bacame vile and insulting cause your valid issues to “fade away”.
I will resend some of the lost post in a new thread because of my “attention span” concerns.
Thanks For Listening ,and a Special Thanks to Ana K Soares
John H.

john hesse August 6, 2012 at 12:05 PM

Bom Dia, Francisco Almeida

Just a few closing thoughts to this matter. First I won’t rehash the insulting manner your “brush painted” an entire country in one stroke.
You spoke of “friendship with all neighbors. Neighbors implies shared borders or maybe even a shared continent. I don’t know your thought processes from a single confusing post laced with contempt.

No matter where you live if you seek the truth you can’t read just one newspaper read five. Same goes for internet sites posting news but from what slant. My point is “Do your homework” before you post learn all you can about everything and absorb all that data and filter out private agendas of the site , paper , or book and even the person’s personal agenda or it’s place in a bigger plan.
I have a thirst for knowledge and thrive on checking all angles before I form an opinion. My Dad taught me that and I considerate it a beautiful gift.
Ok, “Howdy Neighbor” time. Again your defination of neighbor would be nice to know but not needed. I have a feeling I may know more about certain aspects of your country than you do. No offense just a fact.
Pres. Chavez joining Mercosur brought a quick invitation to Brazil for Chavez and Pres. Christina Kirshner. Chavez being there brought an instant clousure to an aviation deal that has been in the works already. When he left the deal was done that could bring up to $900 million to Brazil. Conviasa Airlines needs planes. Chavez committed to 6 E-190 planes from Embraer right now worth $270 million . There is an option for 14 more to bring it up to the 900 million dollar level. That is a sweet deal for Brazil and could be a “neighbor” deal.
Did you know Brazil is upgrading their Presidental Jet from a 2004 Airbus with a limited flight capacity of around just 3400 miles (5,472 kilometers) while modern jets World Leaders have go 7,000 miles easily (911,265 kilometers) much safer because of hardly a stop just for fuel.
Boing is involved . A neighbor in the US. Boing is also producing a transport refueling plane with Embraer. Also, Boeing is giving them newer technology for their light Jet Fighters that enable them to partipate in the bidding for planes wanted by the USAF. Yet, wait there is more.Brazil is buying some high end Jet Fighters from either their ‘Neighbor” France . The Rafael Fighter or the US made F-18.
Brazil is spending $8 billion reals by Dec. Recently they spent 400 million reals on three Ocean Patrol Vessells with support services from their neighbors The Brits. I’m sure Argentina loved that deal considering The Faulklands. Before you say it , I know Brazil won’t use them in that situation but the money helps the Brits plus the Faulklands vote for who they want to be part of next year I believe.
The reason for these purchases is quite rational. Brazil has something like 4.5 million square miles (7.42 million square kilometers)to monitor and the three Ocean Patrol Vessells are to patrol the huge resources off shore in the Rio region and the area where the Amazon meets the Ocean. Enough history for today Fransico.
Thanks For Learning,
John H.

Brian F. Gorman, PhD August 6, 2012 at 7:03 PM

Hey Francisco Almeida: To quote the once great American tennis player, John McEnroe: “You can’t be serious!”

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